Pensions drawdown: don't take too much money out of your pension fund

New evidence suggests people are depleting their pensions too quickly – and they risk running out of cash in retirement.

© David Bagnall / Alamy
Too many pension savers appear to be raiding their piggy banks too early
(Image credit: © David Bagnall / Alamy)

Tens of thousands of savers with large pensions are making withdrawals at such rapid rates that they risk running out of cash in retirement, new data from the Financial Conduct Authority (FCA), the City regulator, reveals.

The statistics suggest that while people with larger pension funds are less likely to be making substantial withdrawals, a significant number of savers are still taking out more than 6% of their money each year – and many are taking out 8% or more. But the data on withdrawals from pension funds, which became far easier to make following the 2015 pension freedom reforms, has long been a source of dispute.

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David Prosser
Business Columnist

David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.